Your partnership:
Accounting systems
Books and records
All businesses must maintain books and records. You can ask us to prepare your annual accounts from these basic books and records, but the efficiency of our work increases as the quality and organisation of your records improves. We recommend that you prepare basic accounting reconciliations. These will enable you to check the accuracy of the information as you go along. Not only will it save you money in accountancy fees, it will also help you ensure that you have collected all the money that was due form your sales, and that you are paying only what you owe.All businesses should retain basic records, including:
- A record of your sales and copies of sales invoices
- A record of your purchases and expenses and with the relevant invoices
- Payroll records
- Details of any amounts that you personally pay into or take out of the business
- Cash book, bank statements, cheque books and paying in books
- Petty cash details
- Fixed asset details
- List of year end creditors, debtors and stock
You should look to:
- File your invoices and correspondence in order
- Record and analyse all your cash, credit card and bank transactions
- Sub-total each page of your cash book and day books, providing totals at the end of each month
- Reconcile your record of payments and receipts with your bank and credit card statements
As a general rule we generally recommend that accounting records are retained for seven years. The guide below provides more detailed guidance.
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Basic accounting reconciliations
You will probably find it easiest to maintain your books by using a computerised accounting package. We discuss this issue (and more) in our Running a business section.Your accounting records will be much more meaningful to you, and enable you to control the business better, if you regularly (monthly or quarterly depending on the size of your business) reconcile and analyse the information yourself (or get an accountant to do it for you).
As a minimum, you should aim to balance your bank account, purchase ledger and sales control account. The guides below provide tips on how to do this.
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You should also reconcile PAYE, NIC, and VAT account balances with amounts due to HM Revenue & Customs.
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Where next?
Within Your partnership...
- Your business structure
- Setting up
- Payroll and PAYE
- National Insurance Contributions
- VAT
- Income tax
- Exiting a partnership
Within Your profession...
General...
